Bronchopulmonary dysplasia (BPD) is the chronic lung disease of the preterm newborn infant with respiratory distress syndrome (RDS). BPD is a major cause of mortality and morbidity after discharge from the neonatal intensive care unit. The therapy of BPD in the newborn period is aimed at reducing pulmonary edema and high airway resistance, with diuretics and bronchodilators leading to transient improvement in airway resistance and pulmonary compliance. Systemic corticosteroids also improve pulmonary function in newborn infants with BPD and several investigators have reported short term improvement in pulmonary function and facilitation of weaning from the ventilator. Recently, dexamethasone has been used early in low birth weight infants at high risk for BPD to facilitate weaning from the respirator. Most studies have started corticosteroid therapy at 14 days of age, when BPD can be diagnosed both clinically and radiographic, and have used dose regimens starting at 0.5 mg dexamethasone/kg/day, which dosage is accompanied by considerable side- effects in a majority of infants. Recent data suggest that lower dosages and earlier intervention are more effective. We therefore propose to evaluate the effect of low doses of dexamethasone (0.2 mg/kg/day), started on day 1 or between days 7 and 14 after birth on the incidence and severity of BPD and overall morbidity in preterm infants with a birth weight of 600-2000 g who qualified for surfactant treatment after birth. We hypothesize that the early administration of low dose corticosteroids in preterm infants with severe RDS and at high risk for BPD will result in improvement in lung function and will preVent or minimize lung injury associated with mechanical ventilation and oxygen toxicity, without significant side effects. Specific aims are to assess (1) the effect of a 14-day course of low dose dexamethasone on pulmonary function in preterm infants with RDS at risk for BPD; (2) if early low dose dexamethasone treatment will permit early weaning of ventilator dependent infants at risk for BPD and minimize chronic lung disease (BPD); and (3) the complications of low dose steroids, including the effect of adrenal suppression.